5 ms·

That's the point. The value of a company is determined by the price that people are willing to buy & sell its shares at, but you don't have to be that person.

That's the point. The value of a company is determined by the price that people are willing to buy & sell its shares at, but you don't have to be that person. The VC fund in the article is basically saying "We believe that anyone buying late-stage startups at these valuations is a fool and is unlikely to get a better price when it goes to the public markets, and we are not going to be the greater fool with your money."

surgical_fire 2y ago
I wonder if that means that the grift is over. The whole VC/startup grift needs the greater fool to be either a big company with money to burn to do an acquisition, or the retail investor to be the greater fool via IPO. This is bad.
- nostrademons 2y ago
  The previous grift is over, the new one (AI) is getting started. VC fund actually wants to exit the old market, where they are the greater fool at the bottom of the pyramid scheme, and enter the new one, where they can find new fools to unload on.
- tombert 2y ago
  Yeah, it really bothers me that as a society we've decided that ponzi schemes are actually fine as long as it has some loose "tech" branding associated with it. It seems like the startup strategy in Silicon Valley is "grow at all costs, worry about profit later, IPO, now it's the public's problem". Of course someone could say "well they're not forcing you to buy the IPO'd stock!", and that's sort of true, but only in the strictest sense. My 401k, like I think nearly everyone's, is a mutual fund, and it invests in a little of everything. I also buy ETFs that do the same thing, because it's really the only way to preserve wealth, for better or worse. Even if I, for example, thought that WeWork's business model was unsustainable, I don't really have a way of "opting out" of buying their stock without effectively starting my own index fund, or having my cash lose value in an FDIC savings account.
  - mandelbrotwurst 2y ago
    Most (all?) retirement plans offer you some amount of choice in funds to invest in, and most companies of the sort you're describing are not included in many of the more popular indices. For example, WeWork was never in the S&P 500. Similarly, target date funds are one of the more popular investments options available as by default and/or recommendation in retirement plans. The first one I checked (Fidelity's Freedom Index) applies its U.S. allocation to large caps, which again means it does not include many of the companies you have in mind.
    - tombert 2y ago
      Fair enough, I guess if the company never makes it to the S&P500 or NASDAQ-100 you're mostly shielded from this stuff if you do the default funds. There are some questionable tech companies on the S&P, like Uber for example, but not as many and nothing as dumb as WeWork. I have a lot of VTI stock right now, which if I understand correctly invests in basically everything in the America stock exchanges, though I guess an argument could be made that I should have known that dumb companies being included in there was always a risk. Still, I don't have to like it, and I do think that a lot of these companies IPOing when they don't really have any way of actually making money is an issue waiting to happen.
      - no_wizard 2y ago
        VTI is a minimum ten year horizon type investment though, which is why it’s often praised by the Boglehead crowd. Hold it for 10-30 years and it’ll be up and to the right. On average 10% gains in a year, though like anything it always fluctuates
        tombert 2y ago
        I have absolutely no plans on selling my stock for the next ten years, but it still means that I'm investing in WeWork whether I like it or not. I agree it's a good investment for long-term stuff, it's the fund that I recommend to everyone.
      - 2y ago
- throwup238 2y ago
  > I wonder if that means that the grift is over. It's just general market conditions. Once interest rates fall, tech VC will go right back to the grift. Biotech has also seen a major slowdown this year too, despite the huge $43b, $14b, $10.8b, $10b, $8.7b, $7b and $7b [1] acquisitions last year and all the usual IPOs. It's just interest rates catching up to everyone's funds. [1] Seagen, Karuna Therapeutics, Prometheus Biosciences, Immunogen, Cerevel Therapeutics, Reata Pharmaceuticals, Mirati Therapeutics
  - surgical_fire 2y ago
    I truly hope you are right, otherwise market conditions will only deteriorate further for whoever work in tech.
- Yeul 2y ago
  An analyst on the radio talked about Saudi Arabia. Apparently their sheikh is tightening the budget and Arabs always were the biggest fool. It's having a huge impact on grifters world wide.
- klranM 2y ago
  I think we just have near stagflation in Europe and a bad economy + inflation in the U.S. If certain wars are stopped, energy prices go to normal and the excess COVID money supply is gone, things will be as before. But the U.S. population has to want it rather than voting emotionally again.
  - tivert 2y ago
    > ...things will be as before. > But the U.S. population has to want it rather than voting emotionally again. Why would the US population want: >> The whole VC/startup grift needs the greater fool to be either a big company with money to burn to do an acquisition, or the retail investor to be the greater fool via IPO. ? IMHO those greater fool-based moneymaking schemes can go die in a fire.
    - surgical_fire 2y ago
      > Why would the US population want: >>> The whole VC/startup grift needs the greater fool to be either a big company with money to burn to do an acquisition, or the retail investor to be the greater fool via IPO. I was the one that originally wrote that. Bear with me for a second. I avoid working for startups, but the VC/startup grift indirectly benefits me, as they soak a bunch of software developers from the market at large, increasing demand and salaries across the board. I call it a grift out of sincerity, but I was never hypocritical to pretend I didn't benefit from it. As for the general population is hard to say. The layoffs that affected tech reached way beyond cushy software engineer jobs. We may recognize that building castles on sand is a bad idea. Perhaps our economies, and the rules that create incentives (perverse or otherwise) should be different than they are. Fact is, we have a lot of fucking castles built on sand right now. If they crumble, a lot of people will be left to wander among the rubble. I do hold a deep despise for the billionaire class that was the ultimate beneficiary of this whole "building castles on sand" activity. It's not them who will lose the most when everything crumbles though.
      - tivert 2y ago
        > I avoid working for startups, but the VC/startup grift indirectly benefits me, as they soak a bunch of software developers from the market at large, increasing demand and salaries across the board. I call it a grift out of sincerity, but I was never hypocritical to pretend I didn't benefit from it. I get that, we as software engineers have indirectly benefited from the scam. > As for the general population is hard to say. The layoffs that affected tech reached way beyond cushy software engineer jobs. I don't think it's hard to say. If the general population was made understood the full situation, they'd tell us software engineers to get lost along with the billionaire VCs, because the general population are the ultimate greater fools that pay for it all (either directly through the stock market, or indirectly through the businesses who make so much through monopoly off of them that they can easily afford to be greater fools). We software engineers have had a pretty privileged time while a lot of people have been struggling (viz. the whole "learn to code" bandwagon from a few years ago).
s1artibartfast 2y ago
Emphasis on the "and" in "buy and sell". It is not one or the other, you need agreement to have a price.

surgical_fire 2y ago

I wonder if that means that the grift is over. The whole VC/startup grift needs the greater fool to be either a big company with money to burn to do an acquisition, or the retail investor to be the greater fool via IPO. This is bad.

nostrademons 2y ago
The previous grift is over, the new one (AI) is getting started. VC fund actually wants to exit the old market, where they are the greater fool at the bottom of the pyramid scheme, and enter the new one, where they can find new fools to unload on.
tombert 2y ago
Yeah, it really bothers me that as a society we've decided that ponzi schemes are actually fine as long as it has some loose "tech" branding associated with it. It seems like the startup strategy in Silicon Valley is "grow at all costs, worry about profit later, IPO, now it's the public's problem". Of course someone could say "well they're not forcing you to buy the IPO'd stock!", and that's sort of true, but only in the strictest sense. My 401k, like I think nearly everyone's, is a mutual fund, and it invests in a little of everything. I also buy ETFs that do the same thing, because it's really the only way to preserve wealth, for better or worse. Even if I, for example, thought that WeWork's business model was unsustainable, I don't really have a way of "opting out" of buying their stock without effectively starting my own index fund, or having my cash lose value in an FDIC savings account.
- mandelbrotwurst 2y ago
  Most (all?) retirement plans offer you some amount of choice in funds to invest in, and most companies of the sort you're describing are not included in many of the more popular indices. For example, WeWork was never in the S&P 500. Similarly, target date funds are one of the more popular investments options available as by default and/or recommendation in retirement plans. The first one I checked (Fidelity's Freedom Index) applies its U.S. allocation to large caps, which again means it does not include many of the companies you have in mind.
  - tombert 2y ago
    Fair enough, I guess if the company never makes it to the S&P500 or NASDAQ-100 you're mostly shielded from this stuff if you do the default funds. There are some questionable tech companies on the S&P, like Uber for example, but not as many and nothing as dumb as WeWork. I have a lot of VTI stock right now, which if I understand correctly invests in basically everything in the America stock exchanges, though I guess an argument could be made that I should have known that dumb companies being included in there was always a risk. Still, I don't have to like it, and I do think that a lot of these companies IPOing when they don't really have any way of actually making money is an issue waiting to happen.
    - no_wizard 2y ago
      VTI is a minimum ten year horizon type investment though, which is why it’s often praised by the Boglehead crowd. Hold it for 10-30 years and it’ll be up and to the right. On average 10% gains in a year, though like anything it always fluctuates
      - tombert 2y ago
        I have absolutely no plans on selling my stock for the next ten years, but it still means that I'm investing in WeWork whether I like it or not. I agree it's a good investment for long-term stuff, it's the fund that I recommend to everyone.
    - 2y ago
throwup238 2y ago
> I wonder if that means that the grift is over. It's just general market conditions. Once interest rates fall, tech VC will go right back to the grift. Biotech has also seen a major slowdown this year too, despite the huge $43b, $14b, $10.8b, $10b, $8.7b, $7b and $7b [1] acquisitions last year and all the usual IPOs. It's just interest rates catching up to everyone's funds. [1] Seagen, Karuna Therapeutics, Prometheus Biosciences, Immunogen, Cerevel Therapeutics, Reata Pharmaceuticals, Mirati Therapeutics
- surgical_fire 2y ago
  I truly hope you are right, otherwise market conditions will only deteriorate further for whoever work in tech.
Yeul 2y ago
An analyst on the radio talked about Saudi Arabia. Apparently their sheikh is tightening the budget and Arabs always were the biggest fool. It's having a huge impact on grifters world wide.
klranM 2y ago
I think we just have near stagflation in Europe and a bad economy + inflation in the U.S. If certain wars are stopped, energy prices go to normal and the excess COVID money supply is gone, things will be as before. But the U.S. population has to want it rather than voting emotionally again.
- tivert 2y ago
  > ...things will be as before. > But the U.S. population has to want it rather than voting emotionally again. Why would the US population want: >> The whole VC/startup grift needs the greater fool to be either a big company with money to burn to do an acquisition, or the retail investor to be the greater fool via IPO. ? IMHO those greater fool-based moneymaking schemes can go die in a fire.
  - surgical_fire 2y ago
    > Why would the US population want: >>> The whole VC/startup grift needs the greater fool to be either a big company with money to burn to do an acquisition, or the retail investor to be the greater fool via IPO. I was the one that originally wrote that. Bear with me for a second. I avoid working for startups, but the VC/startup grift indirectly benefits me, as they soak a bunch of software developers from the market at large, increasing demand and salaries across the board. I call it a grift out of sincerity, but I was never hypocritical to pretend I didn't benefit from it. As for the general population is hard to say. The layoffs that affected tech reached way beyond cushy software engineer jobs. We may recognize that building castles on sand is a bad idea. Perhaps our economies, and the rules that create incentives (perverse or otherwise) should be different than they are. Fact is, we have a lot of fucking castles built on sand right now. If they crumble, a lot of people will be left to wander among the rubble. I do hold a deep despise for the billionaire class that was the ultimate beneficiary of this whole "building castles on sand" activity. It's not them who will lose the most when everything crumbles though.
    - tivert 2y ago
      > I avoid working for startups, but the VC/startup grift indirectly benefits me, as they soak a bunch of software developers from the market at large, increasing demand and salaries across the board. I call it a grift out of sincerity, but I was never hypocritical to pretend I didn't benefit from it. I get that, we as software engineers have indirectly benefited from the scam. > As for the general population is hard to say. The layoffs that affected tech reached way beyond cushy software engineer jobs. I don't think it's hard to say. If the general population was made understood the full situation, they'd tell us software engineers to get lost along with the billionaire VCs, because the general population are the ultimate greater fools that pay for it all (either directly through the stock market, or indirectly through the businesses who make so much through monopoly off of them that they can easily afford to be greater fools). We software engineers have had a pretty privileged time while a lot of people have been struggling (viz. the whole "learn to code" bandwagon from a few years ago).

s1artibartfast 2y ago

Emphasis on the "and" in "buy and sell". It is not one or the other, you need agreement to have a price.